Indonesia and the Philippines coal dependency surges past China and Poland

Coal dependency rising rapidly in Indonesia and the Philippines, overtaking Poland and China

Indonesia and the Philippines are leading the surge in coal dependency in Southeast Asia, with their reliance on coal continuing to grow rapidly in 2023. They outranked Poland and China in terms of coal dependency, whose coal share of generation has historically been one of the highest in the world.

In Indonesia, the share of electricity generated from coal increased marginally to a new record high of 61.8%. This resulted in Indonesia surpassing Poland in terms of share of coal in power generation in 2023, having surpassed China in 2022.

The Philippines’ coal share in generation overtook that of Poland, China and Indonesia in 2023. The country saw a sharp 2.9 percentage point annual coal share increase, from 59.1% in 2022 to 61.9% in 2023.

The rest of the ASEAN region also saw an increase of its coal reliance of 2 percentage points from 31% in 2022 to 33% in 2023. However, this was a rebound following two consecutive annual falls and the coal share of generation was still 3.1 percentage points below 2020 levels.

Overall, Indonesia and the Philippines are the two most coal dependent countries in Southeast Asia and their reliance on coal is growing fast.

Indonesia and the Philippines meet their growing electricity demand primarily with coal

Slow growth in renewable electricity meant that Indonesia and the Philippines met their electricity demand growth primarily with coal.

Two-thirds (67%) of Indonesia’s electricity demand rise in 2023 was met with coal. Demand rose by 17.1 TWh (+5.1%) in 2023 compared to 2022, at the same time coal power rose by 11.5 TWh (+5.6%). The remaining third of the demand rise was met with mostly gas (31%). Solar and wind contributed a mere 2.3% in meeting the demand rise, while hydro generation had fallen by -10% in comparison to 2022. The fall in hydro was offset by a 9-percent rise in bioenergy generation. Since Indonesia began its first wind and solar generation in 2013, their growth has been sluggish. In 2023, wind and solar generation reached 1.2 TWh, adding 0.4 TWh of clean power to the grid.  Overall, clean power generation fell by 0.3% in 2023.

In the Philippines, coal generation rose by 6.5 TWh (+9.7%), much higher than the rise in electricity demand (+5.2 TWh, +4.6%). Gas and other fossil generation fell by 0.8 TWh (-9.2%) and 0.4 TWh (-18%), respectively. Meanwhile, wind and solar generation increased by 0.9 TWh (+31%), meeting 17% of the total increase in demand.

The limited role of renewables in meeting electricity demand growth in Indonesia and the Philippines is in stark contrast with China and Poland, which also have a historically high reliance on coal. Strong wind and solar growth in China and Poland is increasingly reducing the share of coal in the mix. In China, wind and solar met 46% of the substantial 6.9% rise in electricity demand. In Poland, electricity demand fell by 2.8% (-5 TWh), while wind and solar generation grew strongly by 26% (+7.3 TWh). This has resulted in a large fall in coal generation (-22 TWh, -17%).

Indonesia became the fifth largest coal generator in the world in 2023

In 2023, Indonesia became the fifth largest coal power generator in the world, overtaking South Korea for the first time. Among the world’s top ten coal markets, Indonesia has seen the fastest rise, climbing from eleventh place in 2015 to fifth place in just 8 years. This ascent included surpassing Australia in 2018, Germany in 2019, Russia in 2020 and South Africa in 2022.

Indonesia’s rise in the global rankings over the last six years was driven by a 74% surge in coal generation, from 125 TWh in 2015 to 217 TWh in 2023. This represents an annual compounded growth rate of 7.1% per year.

Meanwhile, the Philippines has remained the 17th largest coal market in the world in 2023. It was behind neighbouring Viet Nam (11th) and Malaysia (15th), which have larger power systems. However, in terms of share of coal in total generation, the Philippines was higher, ranking 8th in the world.

Faster wind and solar deployment can reduce coal use in Southeast Asia’s two most coal-reliant countries

Indonesia and the Philippines have seen limited growth in their renewable electricity generation, as their wind and solar potential remains almost entirely untapped.

In Indonesia, wind and solar increased by only 1.2 TWh since the 2015 Paris Agreement and accounted for only 4% of total renewables growth. Bioenergy generation more than doubled over the same period, from 9.8 TWh in 2015 to 22 TWh in 2023. It accounted for 40% of total renewable electricity growth, with the rest coming from hydro (34%), and geothermal (22%).

In the Philippines, wind and solar increased from less than 1 TWh in 2015 to 3.7 TWh in 2023. With limited growth in other renewables, this represented 61% of the total increase in renewables over the same period.

Wind and solar can be deployed faster than any other renewable electricity source and are also the cheapest source of electricity. Accelerating their deployment would allow Indonesia and the Philippines to meet their growing electricity demand with renewables and to reduce their reliance on coal.

Supporting Material

Acknowledgements

Header image

Coal mining in East Kutai district, in the province of East Kalimantan, Indonesia.

Credit: Consigliere Ivan / Creative Commons